Here’s a sweet analogy- think of a home for sale like your favorite bread or pastry. Most, if not all, are best consumed when they’re freshly baked, much like a home that has been fresh on the market. But bread gets stale as days pass by, which makes it less and less appealing. The same can be applied to a listing. As a home’s days on the market creep higher, it gets “stale” and prospective buyers start to be curious. This can be a huge factor in real estate transactions.
So, what does ‘Days on Market’ mean and why does it matter to home buyers? Knowing a home’s days on market is critical in many ways. Read to know more!
Days on Market: what does it mean?
Days on market, often abbreviated DOM, is defined by the National Association of Realtors as the number of days from the date on which the property is listed for sale on the local brokers’ multiple listing services (MLS) to the date when the seller has signed a contract for the sale of the property.
DOM can also be referred to as “time on market” and is basically a measure of how long a house takes to sell. It is also used as a key metric by buyers and real estate agents to see which homes are fresh to the real estate market.
Why DOM matters and how buyers can use it to their advantage
- DOM as a search filter
Buyers and their real estate agents can use DOM as a search filter to identify homes that have been listed for a long time.
- The DOM is an indication of how hot the market is.
The average number of days on the market is often used to describe how hot the market is in a particular area. For instance, in a seller’s market where there are more buyers than the number of homes listed for sale, the days on market are fewer because of the high demand.
- Higher DOM = “Is there something wrong with the house?”
When a home is listed for sale on the market, the usual expectation is that the property will sell quickly. This is because homes generate the most interest when they’re new. If the number of days between the listing and sale is few, it might indicate two things: either there is a high demand, or the property was underpriced but of good value.
The more days on the market there are, the more likely it is for everyone to wonder if there’s something wrong with the house. It might be a beautiful home, but could be overpriced, need help with staging, or isn’t desirable to most buyers. It can also lead buyers to think that the seller is unmotivated, stubborn, or always unavailable to show the home.
- Higher DOM = a potential bargain
The good news on a house with a high DOM? It can also indicate a potential bargain, especially from sellers who haven’t received offers and who may be open to a lower offer. In an area that has many houses listed for sale, and the home has been on the market longer than the other properties, the days on market can become a negotiating tool for the buyer. Work with your agent to learn more about why the property has sat so long on the market, and about the seller’s urgency to sell.
Can a home’s DOM be changed or reset?
Yes, especially in certain markets. If a listing is taken down off the market for a few weeks or months, and then gets relisted with a new, possibly lower price, the DOM counter might restart. This gives buyers the impression that the home just came on the market. The same generally happens if a new agent takes over the listing.
However, most local MLS associations keep track of the Cumulative Days on Market (or CDOM), which is the total market time accumulated on a property, as well as the DOM. In such cases, you need to work closely with your agent to do a deep dive on a listing’s full history so you will know exactly how long the home has been for sale.